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May 3, 2013

In supporting a ‘modest’ 33% increase in the Medicare Levy, Tony
Abbott has either forgotten the sage words of former Treasurer Peter Costello,
or didn’t listen:

"The
easiest spending cut you'll ever make is the new spending you don't go into
because you're not taking anything away from anybody.”

With the budget
in a perpetual black hole scenario ever since Labor took power, and a national
debt predicted to be in the order of $300 billion by the time Labor is voted
out in September, Gillard has proposed two more big spending initiatives to
suck more sustenance out of the economy.The first is the Gonski Education overhaul or spendathon, and the second
is the National Disability Insurance scheme.

Both involve the
expenditure of tens of billions of dollars recurrently into the future, and
both require substantial funding from the states as well when most are
struggling to pare down the debts left after years of Labor state governments.

Some of the left
leaning commentators are hyping them in terms of being Gillard’s effort to
leave some sort of legacy for the future.The reality is more likely to be an effort to buy votes in a desperate
last gasp, and to saddle the opposition with huge unaffordable commitments when
it comes to power after the election.

Even without
these schemes, Abbott is going to need to make some really tough decisions if
his government is going to achieve a balanced budget in anything like the near
future.While he will have the
sort of majority he needs to make such decisions, he will be saddled with the
same problem as Queensland Premier Campbell Newman has.

A fair
proportion of his majority will be members who only win their seats because of
a massive ground swell of anti Labor sentiment.These will be people who know deep down that they are one
term members but hope to swim against the tide of inevitability by trying to
avoid being part of tough decisions.

The Liberal
Party should not be backing more spending at any time, let alone spending that
they will have to pick up the tab for in just over four months.The first priority of an Abbott
government will have to be pulling the economy out of its downward spiral by
chopping the current unsustainable spending.

If the budget
can be brought into surplus, there may be room to assist the disadvantaged
short of a Rolls Royce scheme.Education can probably be addressed with an overhaul of the way in which
current funding is spent.There
has been substantial increases in the education budget over recent years to no
avail, so it seems clear that additional spending is not the answer.